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There's no love or affection but it’s better the devil you know says new survey

The majority of UK solicitors believe the costs management process has had a negative impact on litigation - but still prefer it to fixed recoverable costs.

The Costs Management Survey 2017 by Just Costs Solicitors found that 65% of personal injury solicitors and 60% of commercial litigation solicitors at the UK’s top 200 firms believe the costs management process has had a negative impact on litigation.  Despite their misgivings, 90% of personal injury solicitors and 78% of commercial litigators prefer costs management to fixed recoverable costs.

Responses to The Costs Management Survey 2017 reveal that personal injury solicitors and commercial litigators have differing views on whether their clients would prefer costs management or fixed recoverable costs.

67% of personal injury solicitors believe their clients would prefer costs management, while the majority, 57%, of commercial litigators, believe their clients would prefer fixed recoverable costs.

There is a difference of opinion here. Litigators feel their commercial clients would like to know the risk of financial exposure through involvement in a dispute and potential litigation, whether claiming or defending the matter.  The knowledge of a fixed fee would provide clarity and reassurance within the litigation and dispute resolution process, enabling them to make a decision about the best way ahead from the outset.

In his speech on 28 January to the I.P.A, Jackson LJ revealed his recommendations to extend fixed costs to all civil claims, including personal injury cases up to a value of £250,000, irrespective of complexity. From a litigator’s perspective, this could lead to large corporations spending money at a rate beyond that which is recoverable on disputes with smaller businesses, whose costs are fixed at a lesser rate.

There is also the possibility that a legally complex case, though low in value, would require a significantly greater amount of work to conduct than is allowed by its allocated cost band. This may result in an aversion amongst litigators to take on such complicated, low value cases. Thus, preventing legitimate claims from being pursued, due to the limited amount they would recover in costs.

This figure could also become a reality in the commercial sector. However, in the interests of justice, there is a need to ensure that costs in legitimate, complex matters are not capped at such a level that they become unviable to pursue with the support of properly competent and qualified litigators.
In light of the above and as reflected in the results of The Costs Management Survey 2017, the majority of both personal injury and commercial litigation solicitors have answered that they prefer Costs Management over Fixed Recoverable Costs, in their respective specialisms. This reflects the general consensus that, in this instance, it may be better the devil you know, than fixed costs.

The survey was the first of four market research exercises Just Costs Solicitors will be conducting during 2017.  The firm’s second survey will begin later this month.

Written by Phil Bradbury - Senior Associate and Head of Costs Management

The purpose of this blog is to provide information and discussion. Nothing on this blog should be relied upon as a substitute for advice from a qualified Solicitor regarding any actual legal issue or dispute. Nothing on this website should be construed as legal advice or perceived as creating a solicitor – client relationship. Just Costs Limited can accept no liability in contract or tort to any person, firm or company that relies on or makes use of the above, or any part thereof.